Cash Budget

23. Cash Budget. The following data are from the budget of Ritewell Publishers. Half the company's
sales are transacted on a cash basis. The other half are paid for with a 1-month delay.
The company pays all of its credit purchases with a 1-month delay. Credit purchases in January
were $30 and total sales in January were $180.
Challenge
Problem
Working Capital Management and Short-Term Planning 195
February March April
Total sales 200 220 180
Cash purchases 70 80 60
Credit purchases 40 30 40
Labor and administrative expenses 30 30 30
Taxes, interest, and dividends 10 10 10
Capital expenditures 100 0 0
Complete the following cash budget:
February March April
Sources of cash
Collections on current sales
Collections on accounts receivable
Total sources of cash
Uses of cash
Payments of accounts payable
Cash purchases
Labor and administrative expenses
Capital expenditures
Taxes, interest, and dividends
Total uses of cash
Net cash inflow
Cash at start of period 100
+ Net cash inflow
= Cash at end of period
+ Minimum operating cash balance 100 100 100
= Cumulative short-term financing required